Retired Boulder officers seek pension boost

'Old-hire' pension plan already underfunded, city officials say

Dwayne Schossow at Carter Lake Marina on Friday. Schossow, who worked for the Boulder Police Department for 10 years, is now retired and lives near the lake.
(Greg Lindstrom/Times-Call)

A group of retired Boulder police officers served by an old pension plan, many of whom make less than $2,000 a month, are seeking 10 percent increases and a change to a quirk that leaves their widows earning more money after the former officers die.

The "old-hire" police officers, those hired before April 8, 1978, are under a different pension plan than current officers. Just one old-hire officer still works for the police department and actively contributes to the plan. Another 52 former officers and widows receive pension benefits from the plan.

City Finance Director Bob Eichem said the plan now doesn't have enough money in it to pay even the existing benefits, much less a 10 percent increase, unless the city commits to putting money into the plan from the general fund every year.

Meeting the retirees' request could cost the city between $315,000 and $400,000 a year, he said.

One reason it would cost so much, he said, is that old-hire firefighters probably would expect similar raises. Their plan is better funded than the police plan because they paid more into it during their employment, but it faces similar limitations.

Last week, several retirees, who live along the Front Range and around the country, appealed directly to the Boulder City Council to allocate money for increases, and the council plans to take up the question at a study session next year.

"We feel really, really good that our City Council is going to help us," said Dwayne Schossow, a former Boulder police officer who now lives near Carter Lake.

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Schossow told the City Council that many former officers struggle to make ends meet on their pensions. Because they were government employees, they often have little or no Social Security income to supplement their pensions.

Retirees also feel the plan contains a fundamental unfairness. Under state law, police officers' widows are entitled to payment based on one-third the salary of a first-class firefighter because at one time police officers shared certain duties with firefighters. However, retired police officers only get benefits based on their police salaries.

Because firefighters saw more raises, widows now can earn more than the men who served.

Schossow himself makes $875 every two weeks. If he dies, his wife would receive $933.

Schossow said the retirees want widows to get the benefits to which they are entitled. However, the current system isn't equitable.

"We laid our lives on the line each and every day we went to work, and I feel that no retiree should make less than his wife is entitled to," he said. "All we're asking is that they take care of us."

Until 2000, the plan was fully funded, but like many pension plans, it has been buffeted by the economic downturn and the vagaries of the stock market, Eichem said. In 2008, the plan was only 52 percent funded. The city sold pension-obligation bonds to put an additional $5.5 million into the plan, but it remains only 90 percent funded.

Just providing a 3 percent raise would require the city to put between $96,000 and $125,000 into the plan each year, Eichem said.

In the face of ongoing economic uncertainty, Eichem said he hesitates to recommend that the city commit to an ongoing obligation. However, it's ultimately up to the City Council to decide if the city should make increasing pension benefits a priority.

Boulder Mayor Matt Appelbaum said the old-hire pensions represent a "very complicated issue." The police officers are in a similar position to many other retirees whose benefits are based on much lower salaries from decades ago, he said. Their requests have to be balanced against other city needs.

"I think the council will try very hard to be fair to the service they gave to the city, but we also have to be fair to the times and fair to other people," he said.

Councilwoman Lisa Morzel said she feels a duty to provide adequate benefits to the former officers.

"These people worked for us thinking they were going to get a pension, and they worked in public safety, so they put their lives on the line," she said. "We have a moral obligation."

The pension plan does not provide for specific cost-of-living raises, only that any raises be paid for out of the invested funds.

Schossow said the retirees recognize that the money needs to come from somewhere.

"The only way we get any increases is if the fund is actuarially sound," he said.

At the same time, they believe the city owes the former officers some measure of economic security in their retirement.

"We felt that we have been neglected for years, and it's always the same thing," he said. "We'd go and complain, and they'd give it to us for a few years, and then it would stop."

Schossow compared the cost-of-living raises granted by the Boulder pension fund to those granted by the statewide Fire & Police Pension Association, which now covers roughly 75 percent of all Colorado police officers and firefighters.

The Boulder plan has seen just a handful of increases, each coming after retirees complained to the city, while the statewide plan has seen 3 percent increases most years.

However, Kevin Lindahl, general counsel for the Fire & Police Pension Association, said the state plan is different in several significant ways from the old Boulder plan. Because the plan started in 1978 and requires that officers have either 25 years of service or be 55 years old to retire, there have been relatively few retirees so far, and a large number of current officers pay into the plan every pay period.

With the economic downturn, recent cost-of-living increases have been smaller, and some years there have been none, Lindahl said.

In 2012, the increase approved by the pension board was 0.43 percent. Lindahl said he expects that active members will be asked to increase their contribution in the next year to restore a surplus for future raises.

Schossow said Boulder retirees understand the plan needs to be fiscally sound, but they think former officers need some consideration.

Lloyd Durfee, now 71, said many officers thought they'd see regular cost-of-living increases.

"I loved my job as a police officer," he said. "I started the horse patrol, and it was a great, great job. You just feel like you're abandoned when you retire."

Durfee and his wife, who has multiple sclerosis, live on a little more than $2,000 a month.

With increases in medical expenses and the cost of gas and food, he often can't afford to buy the healthier food he would prefer, he said.

"You can't afford to buy what you'd like to buy at all," Durfee said. "You're just so limited. I never thought it would be like this."

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